Active Bear’s Big Week Brings Score On Netflix, Loss On Riverbed

By Brendan Conway

The popular, $345 million AdvisorShares Active Bear ETF (HDGE) is a short-selling strategy: All this fund does is short stocks. It’s become the market’s biggest actively managed exchange-traded fund focusing on stocks.

Earnings season brings the chance for a short thesis to work out brilliantly. Or not work out brilliantly.

More than a quarter of this fund’s 50 or so “shorts” are due to report this week. As the results through two-plus days are already showing, being short and only short is a tough strategy even when you’re damned good at this, and when you’re proven right. It’s tough even when you have a volatile market at your back.

With all these moving parts, you begin to understand why HDGE — which gained during a rocky market earlier this year but is down 3.5% YTD on a price basis — is up 2.8% since the period beginning right before the start of the DJIA’s three-straight triple-digit slides on Friday. The S&P 500 is down 2.7% over the same span.

Active Bear short picks that are still ahead in today’s earnings reports: Zynga (ZNGA), Homeaway (AWAY), Varian Medical (VAR), and Ancestry.com. Reports later in the week include CME Group (CME) and Vale SA (VALE).

Update 4:34 p.m.: Score one on Zynga! Shares are down 33% in after-hours trading.

About Focus on Funds

As exchange-traded funds and other investing vehicles have ballooned in number, the task of figuring out what works well and what doesn’t has only gotten harder. Barrons.com’s Focus on Funds looks under the hood of ETFs, mutual funds and hedge funds for overlooked values, actionable ideas and the latest pitfalls for fund investors.